Tax Guide, Deductions
Mortgage Interest and Property Tax Deduction
Residents (Form 1040):
For primary residence and second home, report on Schedule A. For rental property, report on Schedule E. If you are self employed and have a home office, you may report the amount attributable to your home office on Schedule C and the rest on Schedule A.
Home Acquisition Debt (primary residence plus second home):
If you loan was secured before 12/15/17, you may deduct interest paid on mortgages up to $1,000,000
If your loan was secured after 12/15/17, you may deduct interest paid on mortgage debt up to $750,000
Home Equity Debt:
You can only deduct interest paid on home equity debt if the debt was used to buy, build or substantially improve the taxpayer's home that secures the loan. The total of the home equity debt plus home acquisition debt cannot exceed $750,000.
You cannot deduct interest from home equity debt for a second home if the loan is secured by the main home and not the second home.
Property Tax Deduction (primary residence/second home):
There is no deduction for foreign property taxes.
The property tax deduction is limited to $10,000, which is split between state/local taxes and property taxes.
Rental Property (Schedule E)
You may deduct the full amount of mortgage interest and property taxes that you paid on a business property.
Nonresidents (Form 1040NR):
There is no deduction for mortgage interest or property taxes on a personal residence. If, however, you own a rental property in the United States, you can deduct mortgage interest and property taxes as a rental business expense on Schedule E.